U.S. Construction Spending Off 0.1% in Jan.

Construction spending fell 0.1 percent in January compared to the previous month, the first drop since July, as the commercial and government sectors contracted, the U.S. Commerce Department said Thursday. Photo: REUTERS

Construction spending fell 0.1 percent in January compared to the previous month, the first drop since July, as the commercial and government sectors contracted, the U.S. Commerce Department said Thursday.

Spending fell to a seasonally adjusted annual rate of $827 billion in January. Analysts polled by Bloomberg had expected a median gain of 1 percent.

Compared to the prior month, residential spending was up 1.6 percent to an annual rate of $260 billion in January, with prviate residential spending rising 1.8 percent to reach the high level in a year, as housing starts increased.

But despite recent gains, homebuilders remain wary. Development of single-family homes has wilted in the face of declining home prices and a glut of unprocessed foreclosures. Multi-family rentals have been more attractive as demand remains high.